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This reportentitled Good Practice Note on (Upstream) Natural Gaswasprepared as a third-party reference document to the Extractive Industries (EI) Source Book.The importance of natural gas in the world, both in developed and developing countries, is increasing in the transition to a low carbon world.The growth of the world gas production, consumption and exports was high in the last decadesand this trend will continue because conventional gas resources are quite large, unconventional gas is more and more exploited and gas has the advantage of a lower carbon content that other fuels.However,gas developments may only occur if countries adoptthe appropriate policies from the ―wellhead to the burner tip‖ for encouraging both gas production and its uses.The objectives of this Guidance areto identify present and desired good or best practiceregarding“upstream” natural gas activities.The gas upstream sector comprises exploration, development and production. The Guidancepaysparticular attention to: upstreamgas policy, strategy,licensing; legal, contractual and regulatory requirements; and fiscal regimes. Insights on the key requirementsfor downstreamgas activities beyond gas production arepresented as gas can only be exploited if it is sold to end-userswilling to pay the appropriate price for investing in the entire supply chain.The Guidance first highlights the critical factors for designing country gas strategies and policies. After a review of the possible uses of natural gas, in particular for power generation, and the structure of the gas industry along the entire supply chain, this document addresses essential upstream gas strategy and policy decisionsfor developing countries. Then, the options available and good practice in the upstream sector as related to legislation, fiscal and regulatory regimesand contractsare presented.Selected examples of practice followed by gascountries in terms of legal, regulatory, fiscal and contractual frameworks applied to the gas activities are enlightened in the document with the details provided in Appendices.

Good Practice Note on (Upstream) Natural Gas

Resource Key: BGM4JI4U

Document Type: Report

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  • EI Sourcebook

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Date: 2012

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This reportentitled Good Practice Note on (Upstream) Natural Gaswasprepared as a third-party reference document to the Extractive Industries (EI) Source Book.The importance of natural gas in the world, both in developed and developing countries, is increasing in the transition to a low carbon world.The growth of the world gas production, consumption and exports was high in the last decadesand this trend will continue because conventional gas resources are quite large, unconventional gas is more and more exploited and gas has the advantage of a lower carbon content that other fuels.However,gas developments may only occur if countries adoptthe appropriate policies from the ―wellhead to the burner tip‖ for encouraging both gas production and its uses.The objectives of this Guidance areto identify present and desired good or best practiceregarding“upstream” natural gas activities.The gas upstream sector comprises exploration, development and production. The Guidancepaysparticular attention to: upstreamgas policy, strategy,licensing; legal, contractual and regulatory requirements; and fiscal regimes. Insights on the key requirementsfor downstreamgas activities beyond gas production arepresented as gas can only be exploited if it is sold to end-userswilling to pay the appropriate price for investing in the entire supply chain.The Guidance first highlights the critical factors for designing country gas strategies and policies. After a review of the possible uses of natural gas, in particular for power generation, and the structure of the gas industry along the entire supply chain, this document addresses essential upstream gas strategy and policy decisionsfor developing countries. Then, the options available and good practice in the upstream sector as related to legislation, fiscal and regulatory regimesand contractsare presented.Selected examples of practice followed by gascountries in terms of legal, regulatory, fiscal and contractual frameworks applied to the gas activities are enlightened in the document with the details provided in Appendices.

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